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Concept explainers
a.
Concept introduction
The consolidated
To prepare: a
a.
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Answer to Problem 2.28BP
The journal entry so passed gives a debit of investment and credit the cash with the same amount.
Explanation of Solution
Costmethod entry on books | Debit | Credit |
Cash | ||
Dividend income | ||
Record P co. share of the snoopy co. income |
b.
Concept introduction
The consolidated balance sheet and the worksheets are the computed tools that are used to calculated the retained earnings and the dividend produced by the subsidiaries towards its parent company.
To prepare: the consolidate worksheet for the final values
b.
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Answer to Problem 2.28BP
The consolidate worksheet is prepared and discussed.
Explanation of Solution
Book value calculation | |||||
Total book value | = | Common stock | + | Retained earnings | |
Original book value |
Income statement | P | S | Dr. | Cr. | consolidated |
Sales |
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Less Cogs |
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Depreciation Exp |
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Sel. Exp |
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Dividend Income |
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Net income |
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Statement of Retain Earning | P | S | Dr. | Cr. | Consolidated |
Opening balance |
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Net income |
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Less dividend declared |
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End balance |
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Income statement | Peanut co | Snoopy co | Eliminated DR | Eliminated CR | consolidated |
Cash | |||||
Accounts received | |||||
Inventory | |||||
Investment in snoopy co | |||||
Land | |||||
Building and equipment | |||||
Less accumulated depreciation | |||||
Total assets | |||||
Account payable | |||||
Bonds | |||||
Common stocks | |||||
Retained earnings | |||||
Total liabilities |
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Chapter 2 Solutions
EBK ADVANCED FINANCIAL ACCOUNTING
- Intermediate Accounting: Reporting And AnalysisAccountingISBN:9781337788281Author:James M. Wahlen, Jefferson P. Jones, Donald PagachPublisher:Cengage Learning
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